Inside the Marriott-Starwood Merger

Set to be the first hotel group with over one million rooms, Marriott International is on track to merge with Starwood Hotels & Resorts Worldwide. The acquisition of the company on September 23 for $13.3 billion will complete before end of the year. The merger will join more than 5,700 properties and 30 brands across 110+ countries, creating what J.W. Marriott, Jr., Executive Chairman and Chairman of the Board of Marriott International, calls “the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs….”

March 28, 2016 – Anbang Group ups offer to $14 billion, but withdraws three days later.

Marriott wins with bid for $13.6 billion.

Stockholders will greatly benefit from the change. Each stockholder will receive $21 cash and 0.8 shares of Marriott International, Inc. Class A common stock for each of their existing Starwood stocks. Preceding the official acquisition, three new board members have also joined the Marriott team, two of which are former Starwood board members. Marriott still plans to achieve $250 million in annual corporate cost synergies, thanks to massive new mindshare and budding revenue opportunities. The one-time transaction will cost about $140 million, moving Starwood’s brands, including St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Tribute Portfolio, Four Points by Sheraton, Aloft, Element, along with an expanded partnership with Design Hotels, to new ownership.

Combining their loyalty programs is one of the most discussed topics surrounding the acquisition. The Starwood Preferred Guest (SPG) program and Marriott Rewards, which includes the Ritz-Carlton Rewards, are some of the best in the industry. Clients will now benefit from linked reward accounts, providing greater redemption options and a wider selection of destinations to visit. Marriott recently launched a new website to help clients navigate the changing landscape. Right now the website states that three Marriott Rewards is equal to one Starpoint, but is currently keeping the brands and rewards separately branded.

Hotel professionals should take note of the branding overhaul that will follow the merge. While the news of the acquisition served as a branding campaign on its own, Marriott will now be tasked with bringing the 5,700 properties together under a unified message. From Classic Luxury to Premium, Select, and Longer Stays, Marriott is already accustomed to harmonizing its wide array of brands.

“Will there be a culture clash?” Bill Marriott poses on his blog. He doesn’t seem to think so. Instead, he celebrates the 500,000 associates now housed under the Marriott brand. The merger increases the brands’ market share, reduces competition, and pleases customers with greater venue options and double the rewards.

Written by Hannah Burks

Hannah lives in the world of content marketing for Cvent's Hospitality Cloud. She builds blogs, reports, eBooks, and more that bridge the gap between hotel professionals and modern event planners.